A careful look at one of the Obama Administration’s best-known economic documents in favor of free trade is revealing: the study that the Administration claims supports free trade actually found that since 1982 the impact of free trade on the US economy was negative, not positive. Free trade has actually reduced economic growth since 1982!

… Productivity gains between 1982 and 2002, according to their own data (see Table 2.4, pg. 82 of their study) were exactly zero. Well not exactly. In fact, productivity gains delivered between 1947 and 1982 totaled $634 billion. Productivity gains between 1982 and 2002 totaled negative $1 billion.

[. . .] A trade deficit indicates that US consumers and businesses are buying more goods and services from abroad than foreigners are buying here. That has a contractionary effect on the economy because it reduces demand for American products, GDP and employment. The US has been running a growing trade deficit since 1975, which reached $531 billion last year.

The second is the unemployment created by the negative impact of trade policy on certain industries. Economists have shown that many workers made unemployed by import competition often don’t find new jobs for many years, and some never do.

Economists use a lot of words to explain that buying more than you sell is bad for your long-term prospects. It might be great for a few “investors” at the top — for a while — but history shows that a country that for decades sells off its manufacturing ecosystem, devastates communities like Detroit and entire regions like the “rust belt,” lays off millions and keeps wages stagnant for the rest ends up with a Trump finger on the nuclear button.

About Dave Johnson

Dave has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.